1

Introduction to Networks

2

Main Things To Focus On Today

Reasons to be concerned with networks today.• And know some of the reasons for focusing on networks and

benefits that come from doing so.

Common groups to apply SNA to in organizations.• Areas likely to yield greatest strategic impact.

Interpreting an SNA• What are the common things that SNA can tell you (central

people, peripheral people, brokers, fragmentation points)?

3

Where People Engage• Join and commit to

people• Satisfaction and

retention benefits

Why Focus On Networks Now?

Where Work Happens• Lack of boundaries• Informal networks

drive performance

BUT…• Invisible• At odds with formal structure

Where Knowledge Lives• Rely on people for

information• People can provide more

than databases

4

Social Network Analysis Relationships -- Are multi-dimensional and ‘discovered’ through the

questions we ask. Network structure can facilitate or impede effectiveness:

• Are certain people overly central?• Are some people loosely connected and so under-utilized?• Are there divisive subgroups?• Is the network’s level of connection sufficient?

Pam Ed

Sue

•Information/ Knowledge

•Task Flow

•Trust or Energy

TimBob

Sal

5

Operational LinksBali, 2002Jakarta, 2003Singapore Plot, 2001

Strasbourg, 1999

France, 1995

LAX,. 1999

Casablanca, 2003

Morocco, 1994

Istanbul, 2003

9/11/01

Emb, 1998

6

Visualizing Group or Community Development(Harley or XBox)

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How A Group Evolves Over Time

8

Exploration & Production

Z a he er

S ch u ltz

M itch e ll

K lim ch u ck

A n ge lo

K e lle r

S m ith

GeologyD h illo n

M ye rs

PetrophysicalC ro s le y

ExplorationA ve ry

C o rd o za

S u th e rla nd

R a m ire z

DrillingM cW a tte rs

W a ring

ProductionH a ssan

ReservoirH o p p er

ProductionM ila ve c

S e n io r V ice P re sid e n tM a re s

Formal Structure

Sutherland

Smith

Crossley

Dhillon

Zaheer

Keller

Angelo

Schultz

Cordoza

Klimchuck

Mitchell

McWatters

Myers

Ramirez

Avery

Mares

Hopper

Hussan

Milavec

Waring

Informal Structure

Getting things done often depends less on formal structure than on an informal network of colleagues.

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Completions CoP at Halliburton

Representative Issues

•Identifying overly connected people.

•Bridging invisible network silos.

•Creating awareness of expertise distributed in the network.

•Identifying and drawing in peripheral network members.

U.S.

Brazil

Angola

Saudi Arabia

Canada

U.K.

Nigeria

U.S.Gulf ofMexico

Brazil

Angola

UK

Canada

Saudi Arabia

Nigeria

U.S.

Brazil

Angola

Saudi Arabia

Canada

U.K.

Nigeria

U.S.Gulf ofMexico

Brazil

Angola

UK

Canada

Saudi Arabia

Nigeria

U.S.

Brazil

Angola

Saudi Arabia

Canada

U.K.

Nigeria

U.S.

Brazil

Angola

Saudi Arabia

Canada

U.K.

Nigeria

U.S.Gulf ofMexico

Brazil

Angola

UK

Canada

Saudi Arabia

Nigeria

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Completions CoP at Halliburton

Business Results•Lowered customer dissatisfaction by 24%•Reduced cost of poor quality by 66%•Increased new product revenue by 22%•Improved operational productivity by more than 10%

Gulf ofMexico

Brazil

Angola

UK

Canada

Saudi Arabia

Nigeria

Gulf ofMexico

Brazil

Angola

UK

Canada

Saudi Arabia

Nigeria

ONA Results•Cohesion – average # steps for each person to get to another – improved by 25%.

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A stronger network can foster information sharing…

Response of infrequently to very frequently

Existing network with top 15 brokers* (10%

of population) highlighted

Response of infrequently to very frequently

Enhanced network with the top 15 brokers and top

15 peripheral members connected

* A broker is defined as someone who sits on the shortest path between several other individuals

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…and save Capital One 39% more per year

Social Network Analysis estimates time savings per month – “Please provide an estimate below for the typical time saved per month as a result of information, advice or

other resources received from each person.”

Converts time savings into $ value ($63.80/hr)

Current PM Community Savings/Year Potential PM Community Savings/Year

Note: Hourly rate is the weighted average of respondents’ personnel cost. See appendix for cost savings break down.

$1,780,020

$810,005

$2,590,250

Within departments:

Between departments:

Total:

$1,920,124

$1,676,664

$3,596,788

Within departments:

Between departments:

Total:

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Boundary Spanners in Block 5

Seven information brokers (found through the brokerage measures) are identified.

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What Can SNA Show Bob?

Recently accepted a job to lead a key R&D function for a major manufacturing organization. R&D traditionally de-centralized with key units supporting lines of business in four countries. Restructuring recently undertaken to integrate units to:

• Reduce redundancies and • Leverage four kinds of key technical expertise in the pursuit of a new engine platform.

Well known consultancy helped with alignment and implementation. Original leader retired and you (Bob) were parachuted in to save the day.

•Been in the position a little while and have re-vamped the project and budget tracking systems to get control and track progress more effectively.•You are also in daily contact with each of the site leaders to help coordinate activities and plan for the future.

How Are You Doing?

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Core Students Significantly Influence Others: “Please indicate the people below that influence your learning in class.”

Is this healthy? What would we ideally want to see?

Why do people get central in these networks?

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Looking for Peripheral People on the Lawn(Social Network)

Level of Satisfaction:NeutralSatisfiedVery Satisfied

• Significant relationship between Social Ties (Out) and Satisfaction. (0.022)

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Information Network in Class

Males

Females

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Information Network in Class

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SNA can be a powerful tool to look across divisional boundaries...

A Fortune 250 organization asked us to assess the network of its top 114 executives.• Company had grown by acquisition over the past five years and wanted to

assess integration across divisions.

• Also, wanted to work toward a leadership network that was better able to sense and respond to new opportunities.

Initiated a program to develop not a top management team, but a top management network.• Assessed the advice network of this group.

• Introduced both technical and organizational interventions.

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Divisions were acquired with the intent of going to market together: Was it happening?

Division1

Division2

Division3

Division4

Division5

Division6

Division7

Division8

Division 1 5% 11% 2% 6% 7% 1% 10%

Division 2 5% 18% 11% 7% 2% 3% 2%

Division 3 11% 18% 21% 12% 13% 16% 9%

Division 4 2% 11% 21% 6% 7% 6% 6%

Division 5 6% 7% 12% 6% 2% 8% 3%

Division 6 7% 2% 13% 7% 2% 2% 10%

Division 7 1% 3% 16% 6% 8% 2% 0%

Division 8 10% 2% 9% 6% 3% 10% 0%

Avg. 6.0% 6.8% 14.3% 8.4% 6.3% 6.1% 5.1% 5.7%

Demonstrates some collaborating divisions. But more that are not….What might cause this?

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Team members are more than 4x likely to go to each other for information than to people in other groups…

1 2 3 4 5 6 7 81 0.90 0.13 0.03 0.03 0.03 0.13 0.20 0.032 0.20 0.75 0.04 0.03 0.04 0.08 0.16 0.203 0.13 0.08 0.75 0.10 0.36 0.20 0.04 0.044 0.00 0.03 0.00 0.93 0.07 0.00 0.03 0.035 0.03 0.04 0.20 0.17 0.95 0.16 0.00 0.126 0.10 0.04 0.08 0.00 0.28 0.90 0.04 0.087 0.13 0.08 0.00 0.10 0.04 0.16 1.00 0.168 0.17 0.24 0.00 0.10 0.28 0.08 0.12 0.80

Density table for Information Network

What is interesting about team 5 here?

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Other Splits in Block Five

Unknown non-NOVA NOVA Out of State InternationalUnknown 0 0 0 0 0non-NOVA 0.1667 0.2321 0.192 0.1667 0.0938NOVA 0.0769 0.1538 0.16 0.1709 0.2115Out of State 0.037 0.1528 0.197 0.1944 0.1806International 0 0.125 0.231 0.2083 0.3036

What is interesting in this one?

Shows number of connections that exist out of 100% possible in network. Table shows information sharing

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Greek Life in the Social Network

Greeks

Non-Greeks

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Socializing and Learning….

Greek Non-Greek

Greek 28.36% 14.47%

Non-Greek 26.05% 16.05%

Social Network

Greek Non-Greek

Greek 30.41% 11.32%

Non-Greek 15.26% 15.26%

Influence Network

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Looking for connectivity within teams in Block 8

KEY

Group 1

Group 2

Group 3

Group 4

Group 5

Group 6

Group 7

Group 8

Do you see any problems here? What might a poor team network look like?

Untapped Expertise?

Relative Influence?

Different Patterns?

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Some different SNA applications…

Marketing applications:• ‘Viral’ marketing --- “friends” programs or other means of leveraging contacts.

• Word of mouth --- finding influential adapters (e.g., pharma and doctors).

• Sales force effectiveness --- linking networks (inside and outside org.) with performance.

• Business to business marketing --- are appropriate links established across key accounts.

• New product development --- is there effective integration across disciplines?

Finance applications: • Post merger integration --- especially for knowledge-based plays (e.g., PWC and

IBM).

• Due diligence or as an audit function (e.g., Swiss Re or E&Y).

• Alliance configurations and strategy execution.

• Informing stock price models --- how do you think traders make their decisions?

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Picking a Group

•Does effective collaboration matter?•Is size somewhere between 30 and 90? Can you get a full list of names?•Do you expect there to be distinct splits in the network (e.g. across formal or informal lines)?•How hard will it be to get surveys back?•What can you predict?•Have one ready for next class!!!!!!